ISSUES FOR CONSIDERATION

1.1 The main matter for consideration in this Issues Paper is whether, and in what circumstances, arrangements should be made for the circulation of legal advice received by agencies representing the Crown:

• to other agencies representing the Crown;¹ and
• more widely, to the public.

1.2 Significant issues of government policy flow from the main point concerning the circulation of legal advice. In this Issues Paper, the Commission does not seek to decide those questions, but rather to indicate what they are, and to isolate relevant legal issues. The specific points raised for discussion are listed at the front of this Issues Paper and are repeated throughout the text.

1.3 The Commission assumes that government, including Ministers, State-owned corporations, departments, other entities and officials are bound to obey the law and to uphold the rule of law. Parliament is accountable to the electors, while Ministers and officials, in theory, are accountable through the Parliament and also through the rules of administrative law applied by the courts. This Issues Paper indicates some areas in which the Commission considers that wider circulation of legal advice to government might further these ends and, at the same time, improve the efficiency and effectiveness of the operation of government. It seeks comment and information relevant to these issues.

Background to the reference - the Smiles case²

1.4 This reference is the direct result of a recommendation of the Independent Commission Against Corruption (“ICAC”), arising from its consideration of the case of Mr P M Smiles. In 1992, the Member of the Legislative Assembly for the seat of North Shore, Mr Smiles, was charged with certain offences under the Taxation Administration Act 1953 (Cth) and the Crimes Act 1914 (Cth). The Clerk of the House sought advice from the Crown Solicitor as to whether Mr Smiles’ seat would be vacated if he were convicted. The Constitution Act 1902 (NSW) (“the Constitution Act”) provides:

Further disqualifications

13A. If a Member of either House of Parliament:

... (e) is attainted of treason or convicted of felony or any infamous crime,
his seat as a Member of that House shall thereby become vacant.

• the offences under the Taxation Administration Act 1953 (NSW) were “infamous crimes” within the meaning of s 13A(e) of the Constitution Act;
• if Mr Smiles were convicted, the seat would be vacated;
• if convicted, Mr Smiles would lose his entitlement to a parliamentary pension; and
• various consequences would follow if Mr Smiles, having been convicted, appealed successfully against the verdict and conviction.

1.6 The advice was forwarded to the Speaker on 8 February 1993 and to the Tabling Officers of the House on 9 February 1993, with a note to them requesting that the advice be kept confidential.³

1.7 Mr Smiles was convicted of the offences on 21 December 1993. Later that day he wrote to the Speaker tendering his resignation, at the same time maintaining his innocence and stating his intention to appeal. The Speaker received the letter the same day. The next day, 22 December 1993, Mr Smiles applied for a pension under the Parliamentary Contributory Superannuation Act 1971 (NSW). Normally such applications are handled by the NSW Superannuation Office under a delegation from the trustees of the fund established under that Act. In this case the Superannuation Office decided, in the light of the public interest in the circumstances, to refer the matter to the trustees for decision. On 25 January 1994, the trustees (all of whom were Members of Parliament) resolved unanimously to approve payment of a pension to Mr Smiles. The Parliamentary Contributory Superannuation Act 1971 (NSW) gives the trustees a discretion to approve the payment of some pensions in a lump sum. In April 1994, they agreed, unanimously, to exercise this discretion and give approval to Mr Smiles being paid a lump sum.

1.8 In a covering letter to the Chairman of the trustees forwarding his application for a pension, Mr Smiles advised that he had tendered his resignation to the Speaker. He did not mention his conviction, though this was widely publicised at the time. If Mr Smiles had ceased to be a Member of Parliament by virtue of his letter of resignation, he would have been entitled to payment of a parliamentary pension. If, however, he had ceased to be a Member on his conviction by operation of s 13A of the Constitution Act, he would have been entitled only to the contributions he had made to the superannuation fund.

1.9 The trustees did not ask the Speaker or the Clerk if they had received any advice concerning the situation of Mr Smiles and his entitlement to a pension. Neither the Speaker nor the Clerk volunteered that they had such advice, nor did they seek to make this advice available to the trustees. It does not seem that the trustees were at any relevant time conscious of the legal issue presented by the actual circumstances in which Mr Smiles ceased to be a Member of the Parliament. The matter was referred subsequently to the ICAC, which, after considering the Constitution Act and other relevant legislation, published a report that included the following statement:

The Clerk was advised that the Solicitor General had settled the advice, that it was provided for the benefit of the Clerk and should not be relied upon by any other person, although the possibility of its release to Members of the House was recognised. This is not unusual. Legal advice is usually prepared for the specific purpose of the particular client. That is one reason why such statements, as well as disclaimers, are commonplace in legal advice.⁴

1.10 The trustees sought the advice of the Crown Solicitor regarding Mr Smiles’ entitlements on 22 December 1993. The Crown Solicitor declined to advise and suggested that advice be sought from an appropriate Queen’s Counsel. ICAC found that the trustees might have sought independent legal advice but decided not to do so, due to the expense involved.⁵

1.11 Other public officials and bodies had received legal advice concerning the effects and consequences of Mr Smiles’ conviction. The Solicitor General had provided a number of opinions to the Director General of the Attorney General’s Department and the Director General of the Cabinet Office in which loss of entitlement to a parliamentary pension was clearly stated as a possible consequence of conviction for an “infamous crime”. ICAC found that both the Premier and the Chairman of the trustees of the superannuation fund (who was a Cabinet Minister at all relevant times) were aware of the existence of the Solicitor General’s opinions, if not of the detail of their contents, at the time the trustees considered Mr Smiles’ application, because the general questions had been the subject of Cabinet briefing papers. However, it was accepted that the Chairman took seriously the need to distinguish his functions as a Cabinet Minister from those as a trustee, and that there was no dishonesty or corrupt conduct in the way he acted.⁶

1.12 ICAC found that there was no conduct which could be described as “corrupt” on the part of any person. In a second report, the ICAC examined certain provisions of the Constitution Act and other legislation relating to the loss of parliamentary office.⁷

1.13 ICAC was also asked to advise on whether, and in what circumstances, legal advice to agencies representing the Crown should be circulated more widely, but recommended instead that this question be referred to the NSW Law Reform Commission.⁸

Terms of reference

1.14 The NSW Government accepted the ICAC’s advice. Accordingly, in November 1996 the Attorney General requested the Commission to consider:

Whether, and in what circumstances, arrangements should be made for the circulation of legal advices received by agencies representing the Crown to other agencies.

The expression “other agencies” is not entirely clear. For the purposes of this Issues Paper, the Commission will assume that it has a wide meaning.

Issues arising from the Smiles case

1.15 Wider circulation of the advice given to the Clerk may have influenced the course of events significantly. If, for example, the trustees had access to the advice of the Solicitor General and Crown Solicitor, it may not have indicated to them whether or not to grant Mr Smiles’ application for a parliamentary pension, but it would have alerted them to the possible need to inquire further into the issue of whether Mr Smiles ceased to be a Member of Parliament because of his resignation or because of the conviction, and, in any case, whether any act on the part of the Parliament was necessary before either the seat became vacant or Mr Smiles lost his entitlement to the pension.

OUTLINE OF THIS PAPER

1.16 This paper explores the nature of legal advice to government, some of the legal rules currently relating to circulation or publication of that advice. It then seeks comment on whether different rules are required, and if so, what those rules should be.

1.17 Chapter 2 identifies the legal advisers to government, namely: the Attorney General; Solicitor General; the Crown Solicitor; the Crown Advocate; salaried lawyers employed by government agencies and solicitors and barristers in private practice who, from time to time, provide legal advice to government.

1.18 Chapter 3 looks at the recipient of legal advice provided to government agencies. It examines the government as client, including:

• the effect of the application of the theory of separation of powers;
• the nature of the different parts of government;
• the possible effect of the theory of the “indivisibility of the Crown”; and
• the possible consequences of the corporatisation and privatisation of a range of government functions.

1.19 Chapter 4 examines the principal issue of whether advice to government should be more widely available. It then considers whether there is advice which should be excluded from wider circulation.

1.20 Chapter 5 explains the doctrines of legal professional privilege and public interest immunity, and examines their importance in determining whether or not legal advice to government should be made public.

1.21 Chapter 6 raises specific practical issues relating to the publication of legal advice that need to be addressed if it is decided that advice should be circulated. It examines whether a distinction should be made between circulating advice and merely making advice available, the measures that may be required to ensure that the people or departments to whom the advice is relevant actually receive the advice, and the means through which advice should be circulated or made available.

FOOTNOTES

1. Terms of Reference dated November 1996.

2. The following summary of facts is taken from NSW, Independent Commission Against Corruption Report on Investigation into Circumstances Surrounding the Payment of a Parliamentary Pension to Mr P M Smiles (February 1995) (“the ICAC Report”).

3. ICAC Report at 4.

4. ICAC Report at 4 (emphasis added).

5. ICAC Report at 34-35.

6. ICAC Report at 8.

7. NSW, Independent Commission Against Corruption Report on Investigation into Circumstances Surrounding the Payment of a Parliamentary Pension to Mr P M Smiles: Second Report (April 1996) (“the ICAC Second Report”).

8. ICAC Second Report at 21.